Responsible Minister: Dr I. Matsepe-Casaburri.

Accounting Officer: Mr Andile Ngcaba, Director-General – DoC.

The table below illustrates the medium-term expenditure estimates of the DoC and the amounts allocated to the department’s 5 Programmes. The figures in bold print and square brackets are the allocations for the previous financial year.

The DoC committed itself to create a communications sector that will make a difference in the lives of the majority of South Africans, and to use the advantages brought about by technological innovations to enhance economic growth and development. The achievements of the DoC in the previous review period contextualises the challenges facing the department. The department reported the following activities:

• On 15 November 2001, the National Assembly passed the Telecommunications Amendment Bill, following more than 10 months of consultations. The Bill provides for licensing of the 2^nd National Operator, the licensing of SMMEs (Small, Medium and Micro Enterprises) to provide telecommunication services in areas with teledensity of up to 5%, re-engineering public emergency communications services and establishing an education network and edu-rate, which will offer all public schools a 50% discount on Internet connection.
• The National Assembly passed the Postal Services Amendment Bill, while the Electronic Communications and Transactions Bill has been approved by Cabinet.
• Telkom installed 1,5 million telephone lines.
• The DoC launched 8 multi-purpose community centres, 100 public information terminals and 7 citizen Post Offices.
• The Universal Service Agency rolled out more than 100 telecentres and cyber laboratories in all provinces.
• The DoC provided 10 community radio stations with equipment.
• Telkom is ready for the initial public offering.
• Research on convergence was conducted, and the department started the development of enabling legislation.
• The DoC regards human resource development as crucial for the growth and development of the communications sector. The department completed the Information Communication Technology (ICT) in Education Strategy (together with the Department of Education). The strategy focuses on the training of teachers to enable them to utilise ICTs for teaching and learning purposes.
• The DoC undertook a gender analysis of broadcasting policy in order to examine how it can contribute to the advancement of women. The department indicated that similar studies will be conducted around the telecommunications and postal legislation.
• Algeria and South Africa signed a memorandum of understanding in September 2000. An implementation plan was accepted during the South Africa-Algeria Binational Commission which was held in 2001. Provision was made for the establishment of an ICT forum and a joint workshop on sector regulation and frequency spectrum planning and management.
• The DoC acknowledged the challenges which the New Partnership for Africa’s Development (NEPAD) pose to the information and communication technology sector. On 12 – 16 November, South Africa hosted the International Telecommunication Union (ITU) Africa Telecom conference for the second time in 3 years. This again provided the opportunity to address the department’s and South Africa’s contribution to the renewal of Africa. On that occasion, the e-Africa Commission - with a mandate to lead in the creation of an e-literate society across the African continent - was formally launched.

In its financial year under review, the DoC reported that the overall economic performance of the communications sector has been slow and that a number of larger role-players in the sector experienced cuts in profit margins. South Africa did not escape these trends because of the country’s integration into the world economy.

The department identified the following 4 key policy objectives.

• The liberalisation of the telecommunications sector.
• The universal provision of postal services by the Post Office.
• The expansion of the diversity of multi-media services.
• Ensuring the accessibility of the ICT sector.

The liberalisation of the telecommunications sector: The DoC is in the process of liberalising the telecommunications sector and reported that it has created an environment in which a new telecommunications player will enter the market, to compete with Telkom. The Second National Operator, the SNO, will be constituted, consisting of national and international investors once the Independent Communications Authority of South Africa (ICASA) has completed the adjudication process.

The licensing of Sentech contributed towards the liberalisation process. This will provide international access as a carrier of carriers and multi-media services. The new policy makes provision for operator licensing in under-serviced areas with a teledensity of less than 5%.

Electronic Communications and Transactions: National Parliament finalised the creation of a legal environment for those engaging in electronic communications and transactions. This will open opportunities to South Africans to engage in business transactions internationally. It is envisaged that once the process is concluded, South Africa will be given the opportunity to make use of e-commerce opportunities that are in line with international standards.

The broadcasting system: The DoC reported that it started a policy and legislative process that will address the shortcomings of the current broadcasting system in South Africa. The broadcasting system will be expanded to provide a diverse service to all sectors of the population and to separate the South African Broadcasting Corporation (SABC) into commercial and public broadcasting units.

The postal sector: The department is tasked with repositioning the South African Post Office (SAPO) to enable it to live up to new challenges that e-commerce offers. A framework for a national address system is being developed which will ultimately provide all South African households with physical addresses. The department strives towards eliminating poverty and ignorance and to empower historically disadvantaged communities. In order to give effect to this, projects are under way to provide more public internet terminals, post offices, multi-purpose community centres and community radio stations.

International outreach: The department is active in the field of promoting the utilisation of ICTs for the socio-economic development of Africa. The Presidential International Advisory Council (PIAC) and the Presidential National Commission (PNC) give impetus to this initiative. The participation of the department in international information technology organisations and activities enabled South Africa to place the African continent on the agenda of such organisations. According to the department, the NEPAD ICT programme has given it a mandate for the development of the ICT sector. The utilisation of ICT technology worldwide will play a pivotal role in the social emancipation of Africa. In terms of the medium-term expenditure proposals, the Minister of Finance, in his 2003 budget speech, announced that allocationof R1,3 billion to support a growing international role, peace-keeping missions and NEPAD.

There has been significant variations in expenditure on the Post Office subsidy in the year under review. The subsidy was removed in 2000/01. This resulted in a significant drop in expenditure. In 2001/02 the subsidy was re-introduced. The subsidy initially amounted to R600 million (to cover two years’ losses) and in 2002/03 an amount of R300 million was offered. Telecommunications Policy expenditure increased significantly between 1999/00 and 2002/03. Expenditure in this sector increased at an annual rate of 32,1%. An amount of R20 million was allocated over the medium term for emergency call centres. The following additional amounts have been allocated "for various ICT initiatives and to enhance ICASA’s capability": R35 million, R29 million and R19 million.

The expenditure trends of the department’s 5 Programmes are tabled below, together with an outline of the activities under each programme:

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The main challenge facing the broadcasting sector is to increase access to television and radio services. The Broadcasting Amendment Act, Act 4 of 1999, should go some way in expediting this process. Media diversity remains a challenge. The 2002 Broadcasting Amendment Bill makes provision for the establishment of 2 regional television licences. The first licence will be allocated to the northern region and will focus on the Sotho, Tsonga, Venda and Sepedi languages, while the second, for the southern region, will cater for Nguni languages.

The ICT sector as well as the Information Technology (IT) sector pose particular challenges to the DoC. The importance of the ICT sector in the deliberations of the DoC is reflected in a speech by the Minister of Communications on the occasion of the ICT Sector Summit, which was held on 3 June 2002, when she said:

Against this background, the summit was expected to deliberate on and address the following issues:

• Increasing investment in the ICT sector.
• Improving services in the formal sector.
• Improving services in under-serviced areas.
• Human resource development and the impact of HIV and AIDS.
• Industrial strategy and ICT.
• Research and development.
• The ICT sector’s role in NEPAD.

The e-commerce sector is closely linked to the aforementioned ICT and IT sectors. The DoC aims to develop an e-commerce policy to govern electronic and mobile commerce. The main activity in this regard is the establishment of a domain name, and enabling this authority to resolve disputes arising from so-called cyber squatting. The DoC plans to introduce an e-rate to stimulate and facilitate internet usage by public schools, offering such schools a 50% discount on calls to access the Internet, as well as Internet access charges.

The restructuring of the Universal Service Agency is a particular challenge to the DoC. A board consisting of 7 members will oversee the increasing of the Universal Service Fund. Its mandate is the promotion of telecentres, Internet in public schools and public Internet terminals.

Multi-media outputs include the following: The repositioning of Channel Africa as a multi-media service. The key objective of this project is to seek commercial partnership and to establish a new corporate governance structure. The restructuring of the SABC aims to reposition the corporation and to enhance corporate governance. This includes, amongst others, the drafting of policies for disability, children, digital migration and local production, the privatisation of Ciskei and Capital Radio to cover the whole of the Eastern Cape province and a community radio infrastructure support project. As far as local content is concerned, the South African Production Advisory Board will advise the Minister on supporting development, production and display of local content on television and radio and how to redress imbalances in the production industry.

Knowledge Management (KM) has become a prominent feature of the Support Services offered by the DoC. Knowledge-sharing among individuals or groups within an organisation is one of the most important human interaction processes. KM, therefore, seeks to facilitate the flow of knowledge within in the workplace. The KM implementation strategy process began at the Institute for Software and Satellite Applications (ISSA). This was followed by the second phase, which resulted in 18 seminars being held throughout Government departments on national, provincial and local levels.

An amount of R20 million was allocated in 2001/02 as part of the DoC’s R80 million allocation for infrastructure. This allocation would mainly be used for acquiring infrastructure for emergency call centres. The allocation was, however, not spent due to delays in acquiring suitable premises to house the emergency call centre. The funds have since been committed after a tender was awarded for the configuration, delivery and installation of emergency call centre equipment in early 2002.

Following a VAT inspection by the SA Revenue Service, it was determined that the transfer payments received from the DoC by the South African Telecommunications Regulations Authority (Satra), and the grants which the Independent Broadcasting Authority (IBA) had received from 1998 until 2002, are taxable at the standard rate.

An amount of R5 million was saved for the payment for a technology licence to the University of Stellenbosch (the DoC and the University of Stellenbosch concluded a partnership for the construction of a satellite.) An amount of R4 million of this saving was utilised under Programme 1, Administration, for the following projects:

• The training of unemployed graduates in Java programming.
• The development of IT infrastructure in schools.
• Projects for the training of young people for the establishment of websites in indigenous languages.

The remainder - R1 million - will be transferred to the SABC "for the development of Internet content associated with programming for the youth."

The DoC received R7,657 million for "higher than expected salary increases and the effect of the increase in general inflation." This can partly be ascribed to the CPIX (the inflation rate which defines Government’s inflation target) increased to 11,8% in the year to September (as opposed to 5,8% in September 2001). Further increase in CPIX inflation could be expected during 2003. CPIX inflation is expected to reach a turning point of more than 11% by October/November before decreasing. Inflation is likely to fall sharply during the course of 2003 and should be within the inflation target by the final quarter of 2003.

On the occasion of the Third African Union Seminar, which was held on 5 and 6 February 2003 in National Parliament, South African Members of Parliament indicated that it was critically important for South Africans to develop a common understanding of the political direction of the AU, for South Africa. In so doing, members will convey consistent messages to their constituents with regard to the AU. It was also resolved that all political parties and social movements should be encouraged to develop coalitions to promote the AU and NEPAD, and that diplomatic ways be found to articulate subjective problems in Africa, thereby demonstrating the seriousness of the AU and fostering popular support. Although it is conceded that this necessitates an intersectoral approach involving all of South Africa’s Government departments, the DoC is in a decidedly stronger position to sell the AU, Nepad and the PAP.

The DoC seems to have made progress in this field. The department conducted a gender audit of all state institutions (this activity falling under the Ministry), which informed and highlighted some of the gender-related obligations and responsibilities which each organisation had to undertake. The findings of the audit was used as a guideline regarding sector gender equality guidelines. The department’s own gender analysis was done by an external organisation.The analysis focused on the gender desk’s effectiveness in assisting the department in its gender mainstreaming programme, and the actual progress made by the department in gender mainstreaming. The DoC reported that the "findings clearly outline areas still needing attention and areas where the department has done well."

The PFMA is one of the key instruments for the modernisation of South Africa’s system of financial management, to ensure the timely provision of quality information and to eliminate waste and corruption in the use of public assets. In terms of sections 47 and 48 of the PMFA, all public entities must be listed in the different schedules of the Act. The DoC reported that it finalised the listing of all its portfolio organisations.

The impact of technology on economies and human development cannot be overemphasised. The United Nations Development Programme (UNDP) has developed an index, the Technology Assessment Index (TAI) in order to assist nations in developing their technological potential to the fullest. The role of the DoC in technological progress and innovation becomes starkly clear when South Africa was listed in the 39^th position out of 72 countries on the TAI list. Equally disconcerting, 6 of the bottom 9 countries on the TAI list are African. Capital should be made available to improve South Africa’s (and the continent’s) ability to make technological progress. Some scholars are of the opinion that one such obstacle to technological development is inappropriate government policies and that policymakers must therefore balance market needs with societal needs. This could assist in the effective and economic deployment and operation of technologies. The DoC’s role in this process is of paramount importance in placing South Africa and the continent on the information highway.

Department of Communications Annual Report, 2001-2002.

The Estimates of National Expenditure, 2003.

Adjusted Estimates of National Expenditure, 2002.

The Medium-term Budget Policy Statement, 2002.

"Charting a New Course: Globalisation, African Recovery and the New Africa Initiative", published by the South African Institute of International Affairs, 2002.

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